Planning for a new arena behind the Bally’s and Paris casinos on the Las Vegas strip is proceeding, albeit slowly, while efforts to bring a new arena to the city of Las Vegas are stalled because of economic woes.
Planning for a new arena on the Las Vegas strip behind Bally’s and Paris Las Vegas casinos is proceeding, albeit at a slow pace because of the econonic woes in the credit markets — woes that may doom other arena efforts in the area.
The plan, which calls for a 20,000-seat arena on vacant land behind the two casinos, is pitched as a partnership between casino owner Harrah’s and entertainment giant Anschutz Entertainment Group (AEG), which owns and/or manages arenas and stadiums in Los Angeles, San Diego and Kansas City, among other places. It’s been a slow process for the pair to work out a plan for an arena, especially when raising the capital largely fell on AEG, with Harrah’s providing the land. Raising $500 million these days is not an easy task, and although there probably won’t be any political opposition in Clark County against the arena, there surely will be no financial support, either.
And financial support is in short supply in the city of Las Vegas, where Mayor Oscar Goodman continues to talk of a new arena or major-league baseball stadium in downtown Vegas. Goodman’s power doesn’t extend to the Strip — city limits end at Sahara Boulevard — and he has a significantly weaker hand in terms of any tax inventives to offer an arena development. Though there’s still some noise about Goldman Sachs developing an arena at the Stratosphere arena — Goldman Sachs, through its Whitehall Street Real Estate Funds division, owns the Stratosphere and 17 adjacent acres of land — recent market woes may cause the financial giant to rethink a highly speculative, $500-million arena project.
Of course, the issue is a tenant for an arena should one be built in Sin City. Pro sports is a hard sell in the tourism-based economic. And although AEG has managed to generate revenue managing Kansas City’s Sprint Center without an NBA and NHL tenant, the firm’s financial exposure was limited, augmented by city funding. In Kansas City, AEG control the lead facility, but in Las Vegas there’s a multitude of entertainment options, to say the least, including Thomas-Mack Arena and the arenas at the MGM Grand. So a sports tenant is probably a necessity, and while both the NHL and NBA have expressed interest in a Vegas team, there’s the very serious question of whether a small market can support a major-league team.